ExxonMobil reports ‘minor’ oil spill at Liza Two project

Sep 11, 2022 News

…EPA says investigations ongoing

By Davina Bagot

Kaieteur News – The Environmental Protection Agency (EPA) said it is currently probing reports of an oil spill at the Liza Two offshore development in the Stabroek Block.

The Liza Unity FPSO

On Saturday, the oil giant said the team on the Liza Unity Floating Production Storage and Offloading (FPSO) vessel observed a sheen on the water in the vicinity of the vessel on September 9, last.

According to the oil company, initial investigations indicate that about one barrel of crude was released during a maintenance activity on the vessel. Further, the activity was immediately halted and the leak was cut off.

On Saturday, Exxon said, “additional surveillance by helicopter confirmed that there was no sheen in the area; only a light sheen was perceptible approximately 20 km (13 miles) North West of the vessel. By midday on September 10, a support vessel in the area confirmed no further sign of a sheen.”

The response teams are continuing to monitor the situation with the relevant government agencies notified of the incident.

The Liza Unity FPSO started up production in February of this year. It is the country’s second FPSO to become operational – producing about 220,000 barrels of oil per day.

Executive Director of the EPA, Mr. Kemraj Parsram on Saturday confirmed that the regulatory body had received the report and are investigating. He explained that the EPA is still trying to determine whether the spill was just limited to one barrel of crude.

Minister of Natural Resources Vickram Bharrat when contacted said he would check on the report issued by Exxon before responding. He subsequently noted that the matter is being investigated by the environmental watchdog and that a team from the EPA and his Ministry will be visiting the site today to conduct first hand inspections.

ExxonMobil said there were no pictures of the spill.

It was only on Thursday that one of the Stabroek Block shareholders, Hess Corporation pointed out the need for operators to practice strict adherence to the nation’s environmental rules, even as Government has indicated its desire for the expeditious development and production of hydrocarbons.

Chief Executive Officer (CEO) of Hess Corporation, John Hess during his participation at Barclays CEO Energy-Power Conference in New York, USA said it is clear that the government wants its environmental rules to be adhered to and respected, adding that he believes the partners have delivered on this request.

On the other hand, this newspaper has been on the forefront, highlighting the need for full liability coverage in the event of an oil spill. Even though this is a requirement in the Production Permits, ExxonMobil is yet to produce proof of a letter in which it agrees to cover damages that the limited insurance policy does not compensate for.

Instead, the company has explained that its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) which operates the Stabroek Block, owns assets valuing over US$5 billion.

More importantly, the oil company assured that there is US$600 million that has been put aside by the Stabroek Block operators to cover oil spills per disaster in the rich Stabroek Block, where presently production has surpassed 300,000 barrels per day. In addition to that, it was reported that a US$2 billion parent company guarantee is being negotiated.

This means, however, that the immediate clean up finances could only amount to US$2.6 billion, meaning Guyana could be left to foot the additional charges that may be associated with an oil spill.

In fact, experts and environmental activists have questioned this sum in light of recent oil spill accidents. In Peru for example where only 12,000 barrels of crude was spilled offshore, Repsol – the Spanish operator of the block- has been slapped with a US$4.5 billion lawsuit.